Contribution to Government's Policies and Objectives
As stated above, the proposed White Hill development contributes to the government's stated objectives for the energy sector (energy efficiency and security of supply with an increasing focus on renewables) and is consistent with the principles for sustainable development.
Security of Supply
Ensuring security of electricity supply is a critical issue for all New Zealanders and for the government. There are two aspects to security of supply. Firstly, it is imperative to minimise the risk associated with dry years and secondly to ensure that New Zealand has the generation capacity over the long term to meet the projected growth in energy demand.
Dry Year Risk
Heavy reliance on hydro-generated electricity leaves New Zealand vulnerable to the effects of dry years. 2001 was very dry in the South Island hydro catchments and 2003 was similarly severe, necessitating public electricity conservation campaigns. Dry years indicate the dependence of both consumers and industry on energy as a key element of infrastructure and, consequently, how essential security of supply is.
One of the considerable advantages of electricity generated by wind is that supply is not dependent on rainfall. The White Hill development could help ensure continued electricity supply for both New Zealand consumers and industry during dry periods to reduce the likelihood of future energy crises. Given the possibility that New Zealand has entered an extended dry period, it is highly desirable that additional generating capacity is developed, particularly in the next few years.
Growth in Energy Demand
A further aspect of security of supply is ensuring that New Zealand has the generation capacity to meet the forecasted growth in energy demand. The most recent Energy Outlook provided by the Ministry of Economic Development projects that the composition of energy demand will change as the demand for energy increases, the Maui gas field declines and new technologies for the production, delivery and use of energy become more economically viable.
The reference (baseline) scenario projects that total consumer energy demand will increase by 0.6% p.a. between 2000 and 2025 for 2.5% p.a.GDP growth. Residential sector consumer energy is projected to grow, on average, at 1% p.a. during this period, the industrial and commercial sector to decline by 0.1% p.a., and the transport sector to grow by approximately 1.3% p.a. Over the same period electricity consumption is projected to increase by around 1.2% p.a.2
It is important that, as the means become available, New Zealand undertakes the transition to renewable energy sources to ensure that we have the capacity to accommodate the growth in demand and to compensate for the inevitable decline in non-renewable sources, such as the Maui gas field. The White Hill project would contribute to the increased generation capacity required to satisfy demand while at the same time reducing New Zealand's dependence on non-renewable energy sources.
Sustainable Development Programme of Action for Energy
The Sustainable Development Programme of Action is one of the Government's major over arching documents designed to guide and underpin policy development. Energy has been identified as one of the target areas for sustainable development because of its correlation to economic growth, potential environmental impact, and because both consumers and industry are heavily reliant on its supply.
The major objective of the programme of action for energy is to ensure continued delivery of energy services to New Zealanders. It acknowledges that renewable energy sources, such as wind power, will become increasingly important in providing security of supply and in mitigating harmful effects that energy use can have on the environment. A sustainable energy discussion document, which establishes a policy framework within which energy choices can be considered going forward, was released on 27 October 2004. The document states that sustainable energy must be:
- reliable and resilient;
- environmentally responsible; and
- efficiently and fairly priced.
Specific actions to achieve these outcomes are set out in the government's National Energy Efficiency and Conservation Strategy, the climate change initiatives and the electricity policy statement. The White Hill proposal is consistent with the actions outlined in these documents.3
National Energy Efficiency and Conservation Strategy
The National Energy Efficiency and Conservation Strategy (NEECS) is the government's primary means to achieve outcomes sought in the sustainable development programme of action. The purpose of the NEECS is to facilitate the move towards a sustainable energy future for New Zealand by promoting energy efficiency, conservation, and a transition to the use of renewable energy sources.
The NEECS identifies two key policy directions that support New Zealand's movement towards a sustainable energy economy.
- Ongoing improvement in our energy efficiency
Target: By 2012, energy efficiency throughout the economy will improve by at least 20 percent. This target is equivalent to a continual improvement rate of two percent per annum to 2012. - Progressive transition to renewable sources of energy
Target: By 2012, renewable energy sources will generate an additional 30PJ of energy above 2000 levels. In 2000, renewable energy sources provided 133.5PJ, or 29% of consumer energy. The target means that by 2012, renewable sources should generate a minimum of 163.5PJ of consumer energy, which would equate to approximately a 30-35% market share.
It is estimated that a wind farm development, like that proposed at White Hill, could provide 240 million kilowatt hours of electricity a year, or 0.86 petajoules, which is approximately 2.9% of the renewable target.
Government Policy Statement on Electricity Governance
The Government's overall objective for the electricity industry is to ensure that electricity is delivered in an efficient, fair, reliable and environmentally sustainable manner to all classes of consumer. To meet this objective, the Government favours industry solutions that satisfy consumers' electricity requirements in a manner which is least-cost to the economy and in accordance with the principle of sustainable development.
The government has identified a number of desired outcomes consistent with the above objective. The Meridian Energy proposal would particularly contribute to achieving the following outcomes:
- the electricity sector contributes to achieving the government's climate change objectives by minimising hydro spill, efficiently managing transmission losses and constraints, promoting demand-side participation and energy efficiency and removing barriers to investment in new generation technologies, renewables and distributed generation; and
- risks relating to security of supply are properly managed.
Resource Management (Energy and Climate Change) Amendment Act 2004
The Resource Management (Energy and Climate Change) Amendment Act 2004 has recently been passed by parliament. It seeks greater alignment between local government plans and national energy objectives, outlined in the NEECS and climate change policies, and aims to ensure that councils consider the contribution their regions can make to meeting New Zealand's commitments under the Kyoto Protocol.
Specifically the Act has amended section 7 (other matters) of the RMA to require decision-makers to have particular regard to the efficient use of energy, the effects of climate change, and the benefits associated with the use and development of renewable sources of energy.
Climate Change Policy
The utilisation of renewable resources for energy generation is heavily dependent on the incentives provided by the government's climate change policies.
The Projects to Reduce Emissions mechanism seeks to provide incentives for firms to undertake emissions reductions prior to and during the first Kyoto commitment period (2008-2012). The government intends that the mechanism will promote growth in the renewable energy sector and encourage business practices that are less greenhouse gas intensive. In order to qualify, "Projects" must be uneconomic without payment of an incentive and emissions reductions must be over and above business-as-usual. The incentive for the first tender round was a share of four million Kyoto Protocol "carbon credits".
Significant renewable energy developments have already secured government support being awarded carbon credits under the "Projects" mechanism. In the first tender round 15 initiatives were successful recipients of a portion of the government's credits.
4. The Ministry of Economic Development requests that the consent authority make the following decision:
Approve the application for land use consent.
5. The Ministry of Economic Development may wish to be heard in support of its submission, if any clarification of its position is required.
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